Britain puts green bank on block for $5.9 billion

LONDON: British Business Secretary Sajid Javid said the government would start an auction to sell Green Investment Bank Plc in a deal that may value the institution at as much as £4.2 billion ($5.9 billion).

“The government will start a bidding process on Thursday, seeking to sell 75 to 100% of the institution,’’ Shaun Kingsbury, chief executive officer of the Green Investment Bank, said in an interview. “The deal is due to be complete by the end of the year.’’

“The Green Investment Bank is a world first, and it is a sign of its success that the idea is being copied globally,” Javid said at the Lord Mayor’s Trade and Industry Dinner in London on Wednesday night. “Having proven the business model works, we now want it to make an even greater impact.”

Privatisation would let the bank, which has channeled money into clean energy projects, invest more overseas and in technologies currently restricted by European Union state aid rules.

“Potential new projects include electric vehicles and power-grid upgrades,’’ Kingsbury said.

Javid first announced the sale in July. It required legislation to repeal laws giving ministers control of the institution.

The government has said a sale will give the bank the freedom it needs to raise more capital and widen investments in projects that reduce carbon emissions. These include offshore wind farms, efficient street lighting and energy-from-waste plants.

Kingsbury said he would seeking new owners to invest as much as £800 million a year for the the next three years, and that the bank currently manages assets valued at about £1.8 billion. This would take the value of investment required in the bank to about £4.2 billion.

The bank will announce this week three institutions to nominate the holders of a “special share,” which ministers established to allay the concerns of environmentalists and lawmakers that privatisation would put the bank’s carbonreduction mission at risk.

“We’re absolutely not going to lose our green ethos,” Kingsbury said. “This money is vital to our plans. Our plan is to do more. People are worried we’ll do less.”

He said potential investors included British pension funds, insurance funds, commercial banks and sovereign wealth funds. “We’ve been warming people up for a while and there’s a lot of interest because what we do is really interesting.”

“The government will publish documents Thursday outlining the exact process that bidders will follow,’’ said Kingsbury.